Taxation of OIDAR services: cross border digital supplies to domestic recipients now attract service tax and reverse charge obligations.
OIDAR services are defined as automated, IT mediated electronic services and, under amended rules, the place of provision is the recipient's location. Cross border OIDAR supplies received in the taxable territory are taxable: supplies to non assessee online recipients are taxable on the foreign supplier, while supplies to taxable persons are subject to the reverse charge mechanism. Non resident providers must register (or appoint an authorized agent), comply with return filing and payment obligations, and cannot claim threshold exemption for these supplies. (AI Summary)

Ineligible input tax credit under GST restricts credit for specified supplies and construction-related inputs based on business use.
Section 17(5) lists supplies excluded from input tax credit: motor vehicles and conveyances (with narrow business-use exceptions); specified personal or exempt services including food, catering, beauty, health services, club memberships, rent-a-cab and certain insurance (subject to limited exceptions); works contract and construction-related supplies for immovable property (other than plant and machinery); supplies taxed under the composition scheme; supplies to non-resident taxable persons (except imports); goods for personal consumption, lost or disposed goods; and taxes paid under assessment, detention or confiscation provisions. Definitions for "construction", "plant and machinery", "capital goods", "input" and "input service" determine eligibility based on capitalization and use in furtherance of business. (AI Summary)

Limitation periods for legacy tax disputes preserve notice and appeal rights and keep CESTAT handling pending tax litigations.
The Bill creates a Goods and Services Tax Appellate Tribunal but does not transfer pending appeals from CESTAT, so CESTAT will continue to hear legacy excise, service tax and customs appeals. Existing limitation rules allow revenue officers to issue notices within standard periods and invoke extended periods where evasion involves fraud, collusion, willful misstatement or suppression; consequent adjudications and appeals will therefore persist after GST's commencement. CGST transitional provisions preserve disposal of CENVAT and output duty proceedings under existing law, require cash refunds for amounts found admissible, allow recovery as tax arrears, and bar such amounts from input tax credit under GST. (AI Summary)

Composition tax scheme for small taxpayers permits fixed-rate taxation with eligibility, exclusions and procedural requirements.
Composition tax under the CGST Bill, 2017 permits a registered small taxpayer with aggregate turnover within prescribed limits to pay tax at fixed rates instead of regular GST, subject to specified exclusions and conditions. Composition taxpayers cannot collect tax from recipients or claim input tax credit, must comply with procedural filings and stock disclosure requirements, and face withdrawal of permission, penalties, and application of assessment provisions if ineligible or non-compliant. The scheme requires all registered persons under the same PAN to opt in and imposes restrictions on inter-state supplies, certain services, supplies through specified e-commerce operators, and notified goods manufacturers. (AI Summary)

Retrospective amendment to service tax valuation requires payment on construction contracts involving land, subject to limitation defences.
Section 129 of the Finance Act, 2017 and the Sixth Schedule retrospectively amend rule 2A to provide that the value of the service portion in a works contract involving transfer of land excludes the value of the land transferred. A deeming provision treats actions taken during the retrospective period as validly done as if the amendment had always been in force, creating potential retrospective service tax liability for builders while leaving room for limitation-based defences where show-cause notices were not issued. (AI Summary)

Taxation of non-resident seafarers: salary credited to NRE account not taxable in India for offshore services.
The CBDT Circular dated 11.04.2017 clarifies that salary accrued to a non-resident seafarer for services rendered outside India on a foreign ship shall not be included in total income merely because it has been credited in the NRE account maintained with an Indian bank; crediting to such an account is therefore insufficient to constitute receipt in India under Section 5(2)(a). (AI Summary)

GST intergovernmental implementation shifts to states; state legislatures must enact SGST for nationwide rollout.
With central GST Bills enacted, nationwide operation depends on every State passing the SGST Bill and obtaining gubernatorial assent; Presidential assent to central Acts and state notifications are required before implementation. The article underscores implementation timing risks, the non viability of piecemeal rollout if any State fails to enact SGST, and concerns over administrative fairness, anti profiteering measures, and commitments on tax rate moderation. (AI Summary)

Mandatory GST registration may obligate previously registered dealers to retain provisional registration despite qualifying for threshold exemption.
Section 22(2) mandates that persons registered under existing laws immediately before the appointed day be registered under GST, producing automatic provisional migration; coupled with limited statutory grounds for cancellation and system based migration processes, this creates ambiguity for taxpayers whose turnover falls below the GST exemption threshold and may impede surrender or cancellation of provisional registrations without clear administrative clarification. (AI Summary)

Share premium: where shareholder identity and genuineness are proved, premium receipts are treated as capital, not unexplained income.
Tribunal and High Court applied the pre-amendment unexplained credits standard, holding that where the assessee establishes the identity, genuineness and capacity of subscribing shareholders through requisite forms, bank records and registry filings, receipts of share capital and premium are capital receipts and not taxable as unexplained income; allegations that shareholders are bogus must be pursued by reopening and assessing those shareholders individually rather than adding the amount to the company's income. (AI Summary)

Local PWD rates preferred for construction cost estimation where local conditions mirror the assessed work.
When an assessee lacks proper books for a locally constructed building, LPWD rates should be applied for estimating construction cost rather than CPWD rates; the Supreme Court affirmed the Tribunal and High Court finding in favor of adopting Local Public Works Department rates, while permitting reference to a Valuation Officer when required, because LPWD rates better reflect local procurement, labour and market conditions applicable to the assessee. (AI Summary)

Abuse of process: withholding pendency of statutory appeal can justify costs to deter unnecessary litigation.
The petition challenged an assessment by writ while a statutory appeal was pending, without disclosing that appeal or any attempt to cancel the officer's transfer. By seeking to quash the assessment rather than primarily challenging the transfer that could affect jurisdiction, the petition omitted vital facts and risked misleading the court. Where statutory remedies exist and are pursued, extraordinary writ relief requires full disclosure; concealing pendency of appeal and bypassing available remedies can constitute an abuse of process and justify an award of costs as deterrence. (AI Summary)

Large Taxpayer Unit centralizes tax compliance and administration, enabling single window filings, electronic payments and risk based audits.
Large Taxpayer Unit centralizes assessment, collection, audit and compliance facilitation for single PAN-based large taxpayers, enabling single window electronic filing and payments, assignment of a client executive, transfer of pending notices to the LTU, risk based audit selection, mechanisms for inter unit transfer of inputs and CENVAT credit without duty payment, expedited refund disposal, and specified procedures for opt in/opt out and electronic record provision. (AI Summary)

Goods and Services Tax input tax credit rules affect valuation, construction exclusions, and reversal for unpaid supplier obligations.
Rajya Sabha passed four central GST enactments enabling a national GST framework. Practitioners raised operative questions under the CGST framework: necessity of C forms for inter state purchases; inclusion in taxable value of amounts incurred by recipients; treatment of free supplies; the plant and machinery carve outs affecting input tax credit for construction related supplies; and the compliance rule requiring reversal of input tax credit where payment to the supplier is not made within a prescribed period, including practical issues arising from debit notes and invoice adjustments. (AI Summary)

SPV governance secures municipal control and corporate delivery for smart city projects while requiring dedicated revenue and oversight.
Implementation in India under the Smart Cities Mission channels central support to city-level Special Purpose Vehicles (SPVs) incorporated as limited companies under the Companies Act, 2013. SPVs, jointly promoted by State/UT and Urban Local Bodies with equal shareholding, are vested with planning, appraisal, fund release, procurement, project execution (including PPPs and joint ventures), revenue mobilisation, user charge and tax collection (as authorised by the ULB), and monitoring responsibilities, and must secure dedicated revenue streams to ensure financial sustainability. (AI Summary)

Business expense deductions: entertainment, charitable and political contributions, travel and weighted research donations reduce taxable income with conditions.
Entrepreneurs can claim deductions for ordinary business expenses-including entertainment where business is discussed, charitable donations to specified institutions with non-cash payment requirements above a threshold, political contributions subject to mode and an upper limit relative to gross income, business travel costs reduced for personal side trips, and weighted deductions for scientific research contributions to approved bodies-provided adequate receipts and records are maintained and total deductions do not exceed gross total income. (AI Summary)

Real estate regulation: mandatory project registration and escrow protections enhance buyer safeguards under new framework.
The Real Estate Act mandates registration of projects and agents, requires promoters to deposit 70% of receipts into an escrow account for construction and land costs, compels disclosure of carpet area, sanctioned plans and stage-wise completion schedules, limits advance collections without a written registered agreement, restricts transfer of majority rights without buyer consent and authority approval, and prescribes penalties, remedies and administrative enforcement through state regulatory authorities and appellate tribunals. (AI Summary)

One Nation One Tax questioned as multi-state registrations and separate GST ledgers create heavy compliance burdens and fragmentation.
The article argues that India's Dual GST treats a business with operations in multiple states as distinct persons, requiring multiple state-specific GST registrations and GSTINs, separate electronic credit, cash and liability ledgers, prohibition on cross-set-off of CGST credits between state registrations or between CGST and SGST, duplicated returns, audits and demand proceedings, and transactional consequences such as taxing inter-branch transfers at open market value, resulting in significant compliance burden undermining the objective of a uniform national tax. (AI Summary)

Composition levy: eligibility tied to aggregate turnover threshold; opt-in, category rates, procedural intimation and penalty framework explained.
Composition levy allows a registered person below the aggregate turnover threshold to elect simplified tax at prescribed rates instead of regular GST, subject to reverse-charge exceptions; eligibility excludes specified services, inter-State supplies, supplies via specified e-commerce operators and notified manufacturers, and requires compliance with stock-origin and inward-supply conditions. The option lapses on exceeding the turnover threshold, the opting person cannot collect tax nor claim input tax credit, and statutory rules prescribe electronic intimation, stock statements, withdrawal/denial procedures, and penalty and assessment consequences for ineligible composition payment. (AI Summary)

GST compensation mechanism: provisional bi monthly payments funded by a dedicated cess and final audited adjustment.
A five year compensation mechanism funds State revenue shortfalls from GST implementation via a dedicated cess credited to a non lapsable GST Compensation Fund. Base year revenue is the audited collections for the year ending 31.03.2016 of taxes subsumed into GST; projected revenue applies a prescribed growth rate to that base. Compensation is the difference between projected and actual certified revenues, provisionally paid every two months and finally adjusted after C&AG audit. Unutilized balances are split between Centre and States and CGST/IGST provisions apply to cess administration. (AI Summary)

Capital employed: press all factual and legal contentions, including share premium deployment, to preserve tax claim arguments.
The article stresses that in the Berger Paints disputes the assessee's limited pleading on whether share premium forms part of "capital employed" likely contributed to losses at each appellate stage. It urges adducing evidence that share premium was actually deployed in the business, providing detailed computations of capital employed, and advancing alternative meanings and purposive constructions of "capital employed"-arguing that enumerations after the word "means" can be contextually illustrative rather than strictly exhaustive-so that all practical legal and factual contentions are considered. (AI Summary)